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- 1. Multiple Choice
1. Which of the following is a fundamental quality of useful accounting information?
Conservatism.
Comparability.
Faithful representation
Consistency
- 2. Multiple Choice
What is meant by comparability when discussing financial accounting information?
Information has predictive or feedback value
Information is reasonably free from error
Information that is measured and reported in a similar fashion across companies
Information is timely
- 3. Multiple Choice
What is meant by consistency when discussing financial accounting information?
Information presented by a company that applies the same accounting treatment to similar events, from period to period.
Information is timely
Information that is classified, characterized, and presented clearly and concisely
Information is verifiable
- 4. Multiple Choice
Which of the following is an ingredient of relevance?
Verifiability
Timeliness
Predictive value
Neutrality
- 5. Multiple Choice
Which of the following is an ingredient of faithful representation?
Predictive value.
Materiality.
Neutrality.
Confirmatory value.
- 6. Multiple Choice
Decision makers vary widely in the types of decisions they make, the methods of decision making they employ, the information they already possess or can obtain from other sources, and their ability to process information. Consequently, for information to be useful there must be a linkage between these users and the decisions they make. This link is
relevance
faithful representation
understandability
materiality
- 7. Multiple Choice
The two fundamental qualities that make accounting information useful for decision making are
comparability and timeliness
materiality and neutrality
relevance and faithful representation.
faithful representation and comparability
- 8. Multiple Choice
Accounting information is considered to be relevant when it
can be depended on to represent the economic conditions and events that it is intended to represent.
is capable of making a difference in a decision
is understandable by reasonably informed users of accounting information
is verifiable and neutral
- 9. Multiple Choice
The quality of information that means the numbers and descriptions match what really existed or happened is
relevance
faithful representation
completeness
neutrality
- 10. Multiple Choice
Financial information does not demonstrate consistency when
firms in the same industry use different accounting methods to account for the same type of transaction.
a company changes its estimate of the salvage value of a fixed asset.
a company fails to adjust its financial statements for changes in the value of the measuring unit.
none of these.
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